Acres v. Blue Lake Rancheria Tribal Court

          ORDER GRANTING MOTION TO DISMISS RE: DKT. NOS. 32, 33

          WILLIAM H. ORRICK United States District Judge

         INTRODUCTION

         Plaintiff James Acres seeks declaratory and injunctive relief against defendants Blue Lake Casino & Hotel (“BLC&H”), the Blue Lake Rancheria tribal court, tribal judge Lester Marston, and Anita Huff (“Clerk Huff”), asserting that the tribal court lacks jurisdiction over him in an underlying contractual dispute and that the individual court employees exceeded their authority during the pendency of the tribal action. Defendants move to dismiss to require Acres to exhaust his tribal remedies. Mot. [Dkt. No. 32].^[1] Because tribal court jurisdiction is at least colorable, not futile, and neither motivated by a desire to harass nor conducted in bad faith, Acres is required to exhaust his tribal remedies before bringing his lawsuit in federal court, and defendants’ motion is GRANTED.

         BACKGROUND

         Acres is an employee and president of Acres Bonusing, Inc. (“ABI”), a California distributor for Talo, Inc. Compl. ¶¶ 4, 12 [Dkt. No. 1]. BLC&H sued Acres and ABI in Tribal Court Case Number C-15-1215LJM, on January 12, 2016. Id., Exh. 5. That case concerns an agreement into which ABI and Acres entered with BLC&H for the purpose of providing BLC&H with the iSlot Platform, a casino gaming platform developed by Talo, Inc. (the “iSlot Agreement”). Id. ¶¶ 10, 11. BLC&H’s complaint asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and fraudulent inducement. Id., Exh. 5.

         On January 17, 2016, Acres was served with the summons and complaint in the tribal action. Id. ¶ 25. The summons directed Acres to respond within “five (5) days after service under pain of Default Judgment.” Id. ¶ 26. On January 22, 2016, Acres went before the tribal court to make specially appear for himself and ABI, asserting that the court lacked jurisdiction to proceed with the underlying tribal action. Id. ¶ 28. On January 25, 2016, Clerk Huff notified Acres via email that his special appearances were rejected because they did not comply with tribal court’s procedural rules. Id. ¶ 29. The next day, Acres resubmitted his special appearances. Id. ¶ 30. On February 16, 2016 Judge Marston issued an order rejecting the special appearances and listing the ways in which the filings did not conform to the tribal court’s rules. Id. ¶ 33; Exh. 16. The order provided Acres with 30 days to file an answer or responsive pleading. Id. ¶ 33.

         On March 9, 2016, Acres and ABI filed the instant action in federal court, alleging that it is “not possible for the Tribal Court to provide due process to non-members Acres” and that “because the tribal court answers to the Tribe’s Business Council, and the Business Council derives significant revenue for the Tribe from BLC&H, it is unreasonable to expect the Tribal Court to be an impartial arbiter in [this] dispute.” Id. ¶ 50. Acres also asserts that he never consented to tribal jurisdiction and that “[b]y the Tribe’s own rules, [he] is clearly not subject to the Tribe’s jurisdiction because he has never done business with the Tribal Court’s territorial jurisdiction as a natural person.” Id. ¶¶ 61, 57.

         Acres’s complaint presents five claims for declaratory and injunctive relief: (i) a declaration that the iSlot Agreement does not establish tribal jurisdiction over non-members of the tribe; (ii) a declaration that the tribal court cannot provide due process in cases involving tribal plaintiffs and non-tribal defendants; (iii) a declaration that Clerk Huff exceeded her authority by issuing the five-day summons; (iv) a declaration that Judge Marston exceeded his authority by issuing the February 24, 2016 order; (v) a declaration that defendants “went outside the bounds of tribal law” by serving the five-day summons and bringing the underlying suit; and (vi) injunctive relief prohibiting defendants from continuing the prosecution of the underlying tribal action. Id. ¶¶ 71-84. Defendants moved to dismiss, and I heard argument on July 20, 2016.

         DISCUSSION

         Although defendants make several arguments, this Order focuses on whether this court lacks jurisdiction because Acres has not exhausted his tribal remedies. On this threshold issue, I agree with defendants.

         “Non-Indians may bring a federal common law cause of action under 28 U.S.C. § 1331 to challenge tribal court jurisdiction.” Elliott v. White Mountain Apache Tribal Court, 566 F.3d 842, 846 (9th Cir. 2009). However, as a matter of comity, before bringing suit in federal court non-Indians must generally first exhaust tribal remedies. Id. at 846. The Supreme Court recognizes four exceptions to this requirement: “(1) when an assertion of tribal court jurisdiction is motivated by a desire to harass or is conducted in bad faith; (2) when the tribal court action is patently violative of express jurisdictional prohibitions; (3) when exhaustion would be futile because of the lack of an adequate opportunity to challenge the tribal court's jurisdiction; and (4) when it is plain that tribal court jurisdiction is lacking, so that the exhaustion requirement would serve no purpose other than delay.” Id. at 847 (internal quotation marks, citations and modifications omitted). As to the fourth exception, if the tribal court’s jurisdiction is “colorable” or “plausible, ” the district court is required to dismiss or abstain. See Atwood v. Fort Peck Tribal Court Assiniboine, 513 F.3d 943, 948 (9th Cir. 2008).

         Acres asserts that because the first, third, and fourth exceptions apply he is not required to exhaust tribal remedies. Oppo. 12 [Dkt. No. 40]. I consider each argument in turn.

         I.BAD FAITH

         Acres rests his arguments concerning the tribal court’s bad faith on: (i) issuance of the initial summons that incorrectly provided him with only five days to respond; (ii) Judge Marston’s joinder in the present motion to dismiss; and (iii) an “ambiguously ...